Subscription Secrets 🔮
Hello CX sorcerers and sorceresses,
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Okay, this is a weird one.
This is my first newsie ever written while officially on vacation. I’ve been back and forth on skipping a week, but there’s nothing more important to me than the compounding effect of consistency, so here we are.
Costa Rican Eli here, coming to you from Los Altos Resort in Manuel Antonio, CR! Los Altos Resort is one of my favorite credit card redemptions ever.
2500+ square feet
Three bedroom / Three bathroom suite
Sloths, monkeys, and macaws in the nearby trees
$500+ a night in the off-season, $700+ peak season
Using Chase points and transferring to Hyatt, it’s only 21k points a night, which is generally valued at $210. A total steal!
Costa Rican Noah is a total mood.
In this week’s newsie, we’ll chat about all things subscription.
I’ve been looking forward to this one for a while, and I’m stoked to finally get around to it.
Before we get into it, shoutout to Gorgias, our sponsor for this week’s newsie.
Gorgias is my CX helpdesk of choice and what I’ve used at both OLIPOP and JRB. If you have been here for a bit, you know how much I love Gorgias and why I think it’s an absolute must-have for any Shopify business. More on my fav Gorgias use cases here.
It’s our one-stop-shop for all things customer. If you have any questions about how we use Gorgias or why we chose Gorgias, feel free to email me anytime.
Let’s get into it, shall we?
Subscriptions aren’t new. The concept has been around for hundreds of years.
Milkmen offered subscriptions as long ago as the 1860s, while magazine subscriptions began in the late 1800s. (I did not just google the milkmen thing, I just have an interest in the historical milk industry for reasons.)
We’ve seen subscription-heavy brands do really well in CPG, with Dollar Shave Club exiting to Unilever for $1b in 2016. On average, Americans now spend over $200 on monthly subscriptions.
Subscriptions run the gamut from sensible to slightly silly. I think we can agree that Amazon Prime and Baby Pampers are on the “sensible” side, while Cheesecake, Bagels, and Pickles (!) subscriptions are closer to silly (still on my “must-try” list, though).
What’s more, people have begin subscribing to some totally “non-subscribable” items, such as underwear, in a big way. Should everything under the sun be offered as a subscription?
That’s a very lofty question and above my paygrade, but here’s what I am here to tackle today:
Question: should you offer a subscription option for your product?
What to think about when getting a subscription program set up
Grow your subscription audience thoughtfully
Tactical tips to reduce churn
1. Question: should you offer a subscription option for your product?
When thinking about subscriptions, most of us have negative associations, influenced by the Optimums and Verizons of the universe. Subscriptions sound annoying, not customer-friendly, and to some like a trap (more on that later).
When I was at OLIPOP, the million-dollar question was: Should soda even be offered as a subscription?
The elementary and practical answer to this question is, “IDK, look at your customer data.”
If customers buy your product at a reasonable frequency and a predictable replenishment time frame, it might be a good candidate for a subscription.
But why should you offer a subscription option? What’s in it for you? What’s in it for the customer?
At a basic level:
You get: Recurring revenue without spending money to acquire that customer again.
They get: A discount / free shipping and a recurring soda order (set it and forget it).
But there’s more to it.
2. What to think about when getting a subscription program set up:
When thinking about setting up subscriptions for OLIPOP, I thought about why I hated subscriptions as a customer and sought to resolve those issues with the OLIPOP subscription.
1. Problem: Lack of flexibility - I hated jumping through hoops just to cancel a subscription. Brands like SiriusXM and New York Times still make you call in to cancel a subscription.
Obviously, the goal is to create enough friction that customers think twice about canceling, both from having to call and being pushed to stay by the team tasked with keeping you there.
Switching plans on SiriusXM is almost as tricky as canceling, and most subscription brands don’t make it super simple to make any edits to your subscription. They prefer you forget you are paying for it, tbh. 🤣
Solution: Make it stupid-easy to cancel a subscription. We’ll talk more about how to keep folks around later, but it’s super important to let them go if they are looking to cancel.
Making customers jump through a million hoops won’t keep them around long-term; it’ll just limit the chance of them ever returning due to them now disliking the way your brand makes them feel on their way out.
With OLIPOP, we allowed customers to cancel their subscriptions via SMS by just responding “cancel.” No need to even log in to a portal.
Focus on removing friction before anything else.
2. Problem: Too much product - I hated the idea of a product showing up at my door without a heads-up beforehand. For example, I had a monthly coffee subscription and loved it–I never ran out of coffee.
One month, I was away for two weeks on vacation and came home to a brand new shipment of coffee, but I had not even made through half of my last month’s brew.
Sure, the brand sent emails letting me know about my upcoming order, but with all the spam they sent outside of those “upcoming order” notifications, it was all going to spam.
On top of that, some companies will not even let you know; while getting those transactional emails in CPG is common, most tech companies just charge the card.
Solution: When we were with ReCharge, we leveraged electricSMS to send a text message to customers, letting them know about their upcoming order and allowing them to swap, skip, or cancel their subscription.
We subsequently switched to Retextion, which has that built in as well, plus a whole lot of more cool bells and whistles. (disclosure: I’m an advisor for Retextion)
It looks something like this:
3. Problem: Product Fatigue - Most consumers don’t eat/drink the same thing forever on repeat. Especially with soda, I was worried folks would get bored of a 12-pack of Vintage Cola every two weeks for eternity. Obviously, this is more of a problem with food and beverage than with, say, Netflix.
Solution: We took every opportunity we could to highlight all the flavors, and proactively offered subscription customers to swap flavors and try something new, both on regularly sent emails like the one below, as well as via text to subscription customers.
3. Grow your subscription audience thoughtfully:
When creating a subscription option for your brand, most marketers I’ve spoken to are looking to “build that thing and scale it to the moon”.
Rightfully so. We stan high-LTV customers that only need to be “purchased” once.
Here’s the gap in that thought process:
When customers subscribe to a product without fully mentally subscribing to the idea of getting it on repeat, you often see those folks churning as quickly as they joined.
Some examples of hacks that work short-term and result in high churn include
Pushing customers to purchase 6 / 12 month subscription for food / bev
Making the default purchase option subscription vs. one-time
Offering 50% + off discount for first subscription order
Long story short, the customers that stick around are the ones that made a conscious effort to join your subscription in the first place because they thought the cost-benefit made sense for them.
From my experience, our highest LTV customers were the ones that purchased a variety pack of OLIPOP, decided they loved it, and then converted to a subscription on order #2 or #3. Those customers stuck around for 6-9 months on avg.
Here was the plan that I used to grow the OLIPOP subscription program from 200 to 10k+ monthly subscriptions and sustaining single-digit monthly churn.
We drove first-time customers to a variety pack
We then used repeat to make it simple for customers to repurchase
After order #2, we drove customers toward a subscription with a discount via emails and sms, pushing all those folks toward this page
After surveying a bunch of customers and finding out the perks and rewards they found most appealing, we highlighted those on our subscription landing page:
4. Tactical tips to reduce churn:
A. Focus on long-term nourishment flows: As founders and operators of a brand, we understand our mission/messaging and what long-term product usage can do for our customers, but do they?
Here’s how to architect that. Think about what you’d like a customer to know about your product, vision, and mission, and drip that out over email/SMS/inserts in boxes, etc., over six months. (But also: Don’t forget Eli’s First Commandment: Do not send spammy shit you would not want to receive as a customer!)
Ask yourself, “what do I want customers of 6 months to know about us? Then work backward from there.
B. Focus on the feeling, not the extra chachka in the box: Removing friction and celebrating customers is sometimes more meaningful than the stickers in the box that cost you 69 cents.
This isn’t a hard and fast rule, but we did a/b tested gifting vs. not gifting OLIPOP. We took cohorts of customers and gifted 50% of them (hoodies, $75 plants etc.). We saw no significant difference in retention for those that we gifted.
The only x-factor is if you are focusing on amplifying word of mouth, but avoid it as a pure retention tactic. Instead, focus on early access, exclusivity, etc. Make sure your subscribers feel like the most valuable customers in your world.
C. Offer flexibility wherever you can: I love how Retextion has pushed this with their custom buy-boxes. If your 3PL and ops team allows for it, give the customer all the optionality, and make it perfect for them so that they stick around.
D. Obsessively study the data: If your customer is churning, wouldn’t you want to know why they decided to leave?Most subscription tools offer this out of the box, but very few marketers actually study the data and act on it.
Was too expensive: Increase value perception by adding more product education or offer discount
Disliked flavor etc: Make sure they are aware they can swap very early in the subscription journey
Had too much product: Ensure they are aware they can skip orders, proactively remind them before churn if this is a significant issue. You’d rather a skip than a cancel.
That’s it for this week!
Any topics you’d love to see me cover? Drop a reply!
Appreciate you more than you know,
Excited to be chatting with Sydney Chestler, CX Manager at Glossier, one of the best to ever do this. Sydney and I connected in the CX Friends Discord and she has a wealth of knowledge across all things CX. Welcome to CX Chronicles, Sydney!
1. What is your CX Philosophy?
There’s a common CX goal to “meet the customer where they are,” and while I strongly agree that this is one of the most important ways to help a customer feel supported and heard, my CX philosophy is that it’s just as important to show the customer where you can meet them, too. In a recent CX Chronicles, Ariel Vaisbort mentioned that the bar is low for CX, and I couldn’t agree more.
We see this when a customer reaches out to share their problem, speaking with an overly frustrated tone and expecting that they need to exert force in order to see action. More often than not, the fix is easy. In fact, the CX team is in a position to provide more support than requested, and this is where my philosophy comes in.
With all our CX tools at our disposal, it’s our job to help raise that expectations bar by reading between the lines to provide above-and-beyond experiences that make customers feel truly seen.
A former gTEAM Editor (Glossier’s CX specialists) once put it this way: instead of considering “what can’t I do for this customer,” try considering “what can I do for this customer?” (It’s no wonder that this Editor went on to become a rockstar customer-experience-focused copywriter—shoutout Tristan Powell!) By flipping this script, we give ourselves the opportunity to lead our customers to have an exceptional experience that wows them. To me, great CX means acknowledging and meeting the customer where they are, then making it clear that there’s more opportunity for support and connection if they’re open to it. It provides a level of personalization that creates community alongside support, which makes CX a powerful piece of how customers experience a brand as a whole.
2. Your favorite Glossier CX story?
I’m truly proud of the way the Glossier gTEAM has found ways to make customer experiences feel personal in the way we create community and belonging. It happens in small ways every day that feel simple but in the end, are memorable and special.
For example, at a training session for our Glossier LA retail grand opening last fall, a new Retail Editor spoke about a memorable experience she had years before—an online gTEAM Editor named Mallory had helped arrange a messenger service to deliver a missing product from the NYC flagship to the customer’s hotel room on her quick stay in the city.
What’s even cooler? Mallory was now the Manager leading this LA training session, and was remembered by name! The magic of the experience reflected the power that gTEAM had on Glossier’s sense of community and showed how both customer and specialist grew with the brand.